This project is evaluating a patient-treatment matching strategy to improve residential treatment for substance abuse patients with psychiatric disorders. Its immediate objective is to examine whether the matching strategy results in more effective and cost-effective treatment in VA programs. We hypothesize that patients with severe clinical problems will have better outcomes when they are matched to service-intensive programs; patients with moderate problems will have better outcomes when they are matched to programs having a lower intensity of services. For both patient groups, community treatment should prove to be more cost-effective than hospital treatment.